Deregulating the banks?

Hi folks, I'm having a debate with someone currently who is saying that Ron Paul wants to deregulate the banks (which is the opposite of what I thought he'd do) and they're saying that, therefore, he wants to take America back the the 1920s - pre crash.

I obviously am not stupid and now that Paul is for sound economic policy, so trust what he says, but could someone help me some up why deregulating the banks would be better than the current system of having regulations which worked for years and then breaking those regs to extort money. I thought they were the only things keeping things safe.

(although I guess they don't matter anyway now because banksters do what they want).

Travlyr, thanks for the video. I kinda know all that stuff - was looking for something more about deregulating vs regulating. Like what Seraphim says - but would be good to have some material to reference.

Travlyr, thanks for the video. I kinda know all that stuff - was looking for something more about deregulating vs regulating. Like what Seraphim says - but would be good to have some material to reference.

Thanks.

Hate to say it but judge is incorrect with regards to colonial-scrips, they were often massively devalued & since Americans would pay Brits & Europeans with it, by the time, they Brits used to try to use them to buy something from America, they used to have lost their purchasing-power & that was one of the reasons that pissed British - the inflating worthless scrips
Franklin only thought they were great because he had press & he used to get to print them, there's plenty of material out there about this on the internet & here's Rothbard talking about mostly pre-revolution currencies & scrips

There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman

Hate to say it but judge is incorrect with regards to colonial-scrips, they were often massively devalued & since Americans would pay Brits & Europeans with it, by the time, they Brits used to try to use them to buy something from America, they used to have lost their purchasing-power & that was one of the reasons that pissed British - the inflating worthless scrips
Franklin only thought they were great because he had press & he used to get to print them, there's plenty of material out there about this on the internet & here's Rothbard talking about mostly pre-revolution currencies & scrips

Didn't watch the judge's vid yet, but you are correct about Continental dollars. This is where the saying "not worth a Continental" came from. The dollar was more stable (and paid of the war debt), but still not as good as free market money (which Trav correctly pointed out).

Hi folks, I'm having a debate with someone currently who is saying that Ron Paul wants to deregulate the banks (which is the opposite of what I thought he'd do) and they're saying that, therefore, he wants to take America back the the 1920s - pre crash.

I obviously am not stupid and now that Paul is for sound economic policy, so trust what he says, but could someone help me some up why deregulating the banks would be better than the current system of having regulations which worked for years and then breaking those regs to extort money. I thought they were the only things keeping things safe.

(although I guess they don't matter anyway now because banksters do what they want).

First, you must understand that most of the mess was the result of OVER-REGULATION & government programs :
Yes, the Glass-Steagall was repealed but it was stupid because it & FDIC were a "package-deal" regulations installed in 1933, there were two main parts to this regulation, 1) separation of commerical & investment banking 2) FDIC
The first one was repealed & deregulated but as I've said it was a "package-deal", either they should kept both as it was or repealed both but they repealed the first which merged commercial & investment banking but FDIC was left in tact, now that is problematic, FDIC is essentially backed by Fed & taxpayers' money so with now half the regulation gone, commercial banks could take on more risks & having FDIC along with it is like telling banks - go ahead, take risks, if you make a profit you keep it & if you fail, we'll bail you out - which is why Ron Paul had voted AGAINST this "half-deregulation", both should've been repealed so that banks are on their own instead of having an explicit guarantee of Fed & taxpayers through FDIC

Then there was the the "regulation" of Community Reinvestment Act which FORCED banks to make loans to people who were incapable of (to correct supposed racial discrimination by banks) which the banks had to make by law, they knew these loans were going to go bad sooner or later
And then there's Freddie & Fannie, again government bodies that should NOT even exist, so banks started packaging there good loans with bad ones & passed on as much as they could Freddie & Fannie & rest they got stuck with & tried to juggle around & shift risk around through derivatives but it was a ticking time-bomb that inevitable to off & it did

On top of all this mess, the biggest culprit, Fed kept interest-rates far too low for a long time, when Fed keeps interest low, people borrow more loans & moneysupply increases, now since the whole Community Reinvestment Act, a lot of them ended up buying homes & thereby pushing the home-prices up & up & as I've said, all those bad loans ought to backfire & they did

So, repealing half the Glass-Steagall was government stupidity, having FDIC government stupidity, Community Reinvestment Act government stupidity, & same with Fed - & when all hell broke lose, the banks & derivatives get the blame, sure, they were participants to the process but without all the government help they couldn't have done it So thank government & their "regulations"!

And bailouts were even worse, it's sign of corporatism & it tells the big banks that they can take whatever risks & they can keep the profits & if they fail government will bear the loss through Fed & put it on taxpayers's tax hence Ron Paul voted AGAINST bailouts

What he'd get rid of all this messy "regulations" which really don't help & get rid of FDIC guarantee, send a message that Fed & government won't bail'em out again & possibly, if he could he'd try to get rid of "corporate personhood"
"Corporate Personhood" laws/regulations see companies as "legal persons" so if people running them make bad decisions, only company's assets will be used to pay off company's debts & losses while those running it go scotfree so they know they can take big risks, if they make profits, they pay themselves big salaries, bonuses, etc & if the risks don't pay off then don't have to bear the loss
Repealing "Corporate Personhood" would make the persons running the company PERSONALLY LIABLE as in, if company's assets aren't sufficient enough to cover its losses then those running their PERSONAL PROPERTY will be seized to cover them
So getting rid of this one government regulation will how enormous impact on how banks & companies in general manage risks & no other candidate will even touch this issue because they're all bought by banks & corporations so they can't put people running them in jeopardy

And "Regulations" in general are usually NOT to keep people safe, they're mostly created by politicians for the sake of lobbying corporations, they're just sold as "good" to the people, who probably don't even read or understand the each & every "regulation" that passes; just look at Fed, they'll tell us its so good & everything but it's just money-monopoly cartel-system

There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman

Didn't watch the judge's vid yet, but you are correct about Continental dollars. This is where the saying "not worth a Continental" came from. The dollar was more stable (and paid of the war debt), but still not as good as free market money (which Trav correctly pointed out).

Judge's video mentioned about "Colonial Scrips" which are different from "Continentals", "Continentals" were issued by Continental Congress during the War while "Colonial Scrips" were issued by various states in the pre-Revolution period, they were just as worthless nonetheless That's why Founders didn't allow government to issue paper-money

Here's a good one :Paper money eventually returns to its intrinsic value -- zero.
- Voltaire

There is enormous inertia — a tyranny of the status quo — in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
- Milton Friedman

Not all regulations are equal. Ron Paul wants freedom for banks to lend as they please, but STRICT regulations against fraud, wrongdoing. He wants no freedom for central banks, but all the freedom for banks which are citizen run or local communities approve of, in other words, freedom for the little guy.

As long as you have to pay your tax in the currency of the government, the currency of the government will continue to be the money - everything else will merely be another commodity - exactly as we have it today.

Money is the economic good most desired in a market place.
In today's market, there is one, and only one desire that touches almost every man woman and child that is directed universally - taxation.

That which solves paying taxes will be desired by everyone - and that is the US$.

If a whole basket of currencies or commodities was dumped by God above into the market over night - repealing the tender laws - over night, only one would remain to be seen as money, and that is the US$.

Repealing "Corporate Personhood" would make the persons running the company PERSONALLY LIABLE as in, if company's assets aren't sufficient enough to cover its losses then those running their PERSONAL PROPERTY will be seized to cover them

Check!

Corporations are not people.

All Corporations, which exist to limit liability, are in their root and essence, evil.

As long as you have to pay your tax in the currency of the government, the currency of the government will continue to be the money - everything else will merely be another commodity - exactly as we have it today.

If I hire a roofer to repair my roof, and I pay him 30 pieces of silver, then how is the government going to know how much income he earned? Does he have to pay taxes on his 30 pieces of silver? Why? If he keeps them for 10 years and the Federal Reserve System inflates FRN 10x, does he have to pay capital gains tax on the difference of what they were worth and what they are worth in 10 years? Why?

In today's market, there is one, and only one desire that touches almost every man woman and child that is directed universally - taxation.

That which solves paying taxes will be desired by everyone - and that is the US$.

The States by law, the supreme law of the land, "No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts" Gold and silver are the most desired economic good according to law. I desire that as well because they do not lose value over time.

Originally Posted by Black Flag

If a whole basket of currencies or commodities was dumped by God above into the market over night - repealing the tender laws - over night, only one would remain to be seen as money, and that is the US$.

Commodity money will out compete FRNs as soon as HR 1098 passes. It would be wise to get out of FRNs immediately. Sound money, fully redeemable will liberate the people.

Sweet lord this stuff is quite complex... it's no wonder the country is in a mess when the nitty gritty is the only way to really know what's going on - the surface value of much of the main issues forces speculative conclusions. I base my support of Ron Paul based on a trust that is put together through building a picture of him and his consistent actions, it's obvious who's a pawn and who isn't. But some people can't decipher such qualities in a person - and they won't be voting Paul.

Having known almost nothing about US politics back in 2008, I could still tell that Obama had something dark in store for America. While everyone else was crying and thinking that the utopia had come. People are easy to read. But try and use that in a debate.

Hi folks, I'm having a debate with someone currently who is saying that Ron Paul wants to deregulate the banks (which is the opposite of what I thought he'd do) and they're saying that, therefore, he wants to take America back the the 1920s - pre crash.

I obviously am not stupid and now that Paul is for sound economic policy, so trust what he says, but could someone help me some up why deregulating the banks would be better than the current system of having regulations which worked for years and then breaking those regs to extort money. I thought they were the only things keeping things safe.

(although I guess they don't matter anyway now because banksters do what they want).

The market is more free than it ever has been, to such an extent that it has been free to buy our, and other, governments. You have to separate commercial and investment/merchant banking, so that taxpayer dollars doesn't back speculative activity under the same financial "roof." We have to return to Glass-Steagall banking regulations, and then build our way out of this mess.

Also think of the national debt of the US...say its a lolworthy 100 trillion with entitlements...now compare that to an estimated 4.6(4600 trill) quadrillion dollar denominated derivatives bubble...now laugh really hard at Ron Paul's idea of cutting 1 trillion off our budget. Furthermore it is insane to cut entitlements, or any other part of the budget under the guise of "saving money" or it being "cost effective." The real disease isn't budgets of Nation State's worldwide, its the speculative hordes of capital that have systemically destroyed and bloated the entire monetary system. Thus the only choice is to exert your sovereignty over the private speculative money that is bankrolling fascism all over the planet. If you don't have sovereign control over your money, the creation of credit to monetize, and the exchange rate there-of, you have NO sovereignty in the face of imperial private interests.

Last edited by -C-; 03-04-2012 at 01:39 PM.

"There's no problem with living a double life, it is the triple and quadruple lives that get you in the end. " -Yuri Orlov

You don't even know what intrinsic value means. Intrinsic is just "whatever it is, in and of itself", quite separate from market, or exchange value, or desirability, which by definition are extrinsic.

An egg is an egg. It is comprised of __________, which has _________ physical properties. That is the intrinsic value of an egg.

Rinse and repeat using anything else to find its intrinsic value.

As for RP wanting to deregulate banks, that's both a myth and an over-generalizing misdirection. People think "regulate" and automatically, often erroneously, think "restrict", or "control". Even the words regulation and deregulation have been bastardized, as there are banking regulations that EMPOWER and FACILITATE fraudulent behavior on the parts of banks. So "deregulation" in such cases would be calling for the removal of such empowerment, and replacing those "regulations" with real prohibitions on fraud.

As long as you have to pay your tax in the currency of the government, the currency of the government will continue to be the money - everything else will merely be another commodity - exactly as we have it today.

Yes, yes it would. The government is there to serve the people. If the debts incurred by the government no longer represent the people, the people have the power to RENEG on that debt. End of story.

Money is the economic good most desired in a market place.
In today's market, there is one, and only one desire that touches almost every man woman and child that is directed universally - taxation.

That which solves paying taxes will be desired by everyone - and that is the US$.

See above.

If a whole basket of currencies or commodities was dumped by God above into the market over night - repealing the tender laws - over night, only one would remain to be seen as money, and that is the US$.

You underestimate the power of FREEDOM.

Force is the ONLY thing that is propping up the USD and all other fiat currencies. Once the legal tender laws are removed, the legal use of force EVAPORATES. Therefore, the demand for dollars would plumment (both internationally and domestically).

As bonds flew back into the USG treasury - the outstanding cash needed to pay off the debts would be printed and a massive devaluation would occur as capital moved into MARkET CHOSEN MONEY.

Government is SUPPOSED to be there for the people. I didn't say it was right now. But since many people believe that, as they wake up to the fact that the State is rapping them - they will revolt. You're thick if you didn't catcht he drift of my post.

Taxes have EVERyTHING to do with debt - all government debt is contigent upon it's ability to tax.

Sorry, Steven, but I do absolutely know what "intrinsic" means, and what "value" means.

And there is no such thing that has intrinsic value.

Value is a human application. It is a human concept.

If a human does not value something - it has no value. Period.

Your error comes in not realizing that value has multiple meanings, and that economic value and intrinsic value are two completely different constructs - which you have erroneously conflated, using either the economic or emotional/human definitions for value. It's not.

If there were only economic and emotional definitions for value (two very different meanings as well), then I might be inclined to agree with you that there is no such thing as intrinsic value, because neither of those types of values can be intrinsic to external things. Both the price (in whatever) and desirability (in whomever) are forever extrinsic to the thing considered. The reason I can't agree with you, however, even with this clarification, is that desire for a thing is a value that is intrinsic, however fleeting, to each human - even though it is not intrinsic to what is external to them.

I put an object in your hands. You tell me, or write in a notebook, what you are holding. Not what it does, or how it is valued economically. Just what it is. What are its defining characteristics. Those physical properties are its intrinsic values.

Whenever I hear someone say that something has intrinsic value, I am sure he has a totally confused, crackpot theory of economics in general and monetary theory in particular.

There is also no such thing as intrinsic value.

The meaning of the word "intrinsic" is always difficult to pin down.
It means "autonomous."
It implies there is something 'fixed within in something'

But there is no such things as these in economics.

Carl Menger's in 1871 had an insight that economic value is imputed by each individual.
Without the individual, there could be no such imputing of value.
Further, each individual imputed his own value into things - independent of anyone else.

The meaning of the word "intrinsic" is always difficult to pin down.
It means "autonomous."
It implies there is something 'fixed within in something'

But there is no such things as these in economics.

Oh yeah? Well, the next time you buy apples, or anything else, sold by weight or volume at the grocery store, you will be charged a price. That price will be its market value (in that particular market, should you pay that price) times its intrinsic value, of whatever it is times the number of pounds, ounces, gallons, liters, etc., which represents the intrinsic value (physical properties times the quantity) of whatever it is you are buying.

Intrinsic values are very easy to pin down - if you know what they are, and which ones you care about. You identify and make choices based on intrinsic values all the time without even realizing it. Small, medium or large? Hamburger or cheeseburger? Paper or plastic? Macintosh or Granny Smith? Gold or silver? In economics, intrinsic values are how we identify what it is we are paying for, and by what metric (1 car, a dozen eggs, 50 sq. ft of white vinyl tile, a half gallon of milk, etc., all of which are intrinsic values, autonomous/inherent to the object of consideration). In accounting, the intrinsic values are the entries in the QTY and Description columns.

EDIT: You could buy a little card with a picture of an apple on it, and while it may be useful for something other than food, it won't be nutritious, and it won't be the same as food, because it doesn't have the same intrinsic value of a real apple (i.e., an actual apple, of a given weight of a given variety, complete with color, shape, skin, flesh, core, stem, fiber, vitamins, natural enzymes, etc., all of which are its intrinsic values)

Isn't that a wonderful marriage of physics and economics? Without physics to describe some of the all-important intrinsic values, you might not know what to pay, and they might not know what to charge! Oh, and "per each" leaves us only with the intrinsic value of "one" (of a given thing, it's intrinsic value still being whatever it is - egg, apple, loaf, etc.,) times the price per each. Even then the price will still have a relation to various intrinsic values - like price per pound, oz., gram, liter, gallon, etc.,